Winning in the Age of Bohonomics

Archive for the category “economics”

A lot of talk about the future of work is going on around the world. Almost everybody seems to be worried about what will happen when robotization and digitalization take over more and more of jobs that used to belong to us humans.

Indeed there is a great need for new solutions because there are jobs that will never require a pair of human hands and the development does not show signs of getting slower. Just the opposite is happening, as robots get cleverer and handier they keep on moving to new areas of business, not avoiding even the work of the scientists, nerds or customer servants.

Following the discussion of the future of work in Finland, it seems that a lot of effort is put into making old models solve the new challenges. That will not happen, we think, and therefore we suggest a new design for thriving in the working life where in addition to humans there are several different artificial agents keeping the wheels of economic life and societies rolling.

Work Is Dying – Long Live Work!

Professor Richard Florida has shown in his study ”Occupational and Industrial Distribution in Peterborough” that the number of jobs that include service and creativity will increase whereas jobs in the farming and manufacturing sectors will decrease to an extent that it is not reasonable to compile statistics in those fields anymore – even though growth is strong in those sectors. Somebody or something is working hard in farms and factories!

The former CEO of the International Federation of Robotics Dr. Shinsuke Sakakibara foresaw in 2013 that in the coming five years robots will create millions of high quality jobs – there where robots are used, we would like to add. The benefits of the development are seen for example in the US where Paul Krugman thanked robots for reshoring jobs to America (http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/) . Reshoring seem to be trending in other countries too, thanks to robots and automation.

The window of opportunity is open. Robots and automation create new jobs, innovations, new companies and most important: new possibilities to solve the enormous global challenges we face in our times. However, the window might be closing. What happens when robots storm into service sector, offices and hospitals – places where we are used to see many post-industrial workers? The closing time for the window can be closer than we think – or want to believe. We need to get prepared.

Some politicians still hold on to a dream of a factory to where people swarm to work in five continuous shifts. We have bad news for those politicians: your dream will not come true. The first fully automated factories are running as well as fully robotized hotels. We can see the signs of the new world, now we need to act.

The Future of Work: From Worker to Investor

So, what is the future of work? Micro jobs, part-time jobs, entrepreneurship, these are some of the solutions presented, many of them are seen a part of sharing economy. However, will sharing economy be a sustainable solution? Even Uber that is often portrayed as a leading example of sharing economy have started to put a plan to use robots instead of people in action http://www.theguardian.com/technology/2015/may/22/uber-self-driving-car-pittsburgh

Will entrepreneurship be a solution to guarantee jobs for all? Perhaps not. Not all want to become entrepreneurs and probably there will be companies that need human workers also in the future.

What about basic income? A guaranteed minimum income could be a part of the solution but it does not solve the challenges of globalizing, complex and fragmented job markets. We need new solutions to offer people possibility/possibilities to create a concept for work, a way to combine several jobs in a portfolio that provides economical means for living and wealth creation, inspiration and incentive to use their own capacities optimally and enough safety to enable freedom from fear of survival.

Ladies and Gentlemen: Please allow us to present Work as an Investment!

Work as an Investment means that a person offers her/his work to a company or organization in a same way as an investor invests in shares. During the investment, a dividend is payed, and if the investment is profitable, it can continue. If the investment does not create sufficient value it can be denounced and the company pays the ”price of the day” for the investor. WaaI includes incentives for both the ”employee” investor and the ”employer” or the organization where the investment is placed.

WaaI is a way of doing business with one’s competencies and capabilities. It is not a time-bank where people exchange tasks. It is not a way of crowdsourcing either, even though there are some similarities.

Work as an Investment is a new way of thinking work and job markets, it is based on business- and investment concepts. Elina Lepomäki, a Member of the Finnish Parliament, writes: ” … a direct or indirect border-crossing trade of anybody’s competence is going on. There will be work only for those who have something to give in their domain and can provide it with a market price.”

WaaI is a tool for human beings to deal with their work input like an investor. The work input can be invested in several organizations and by so means build an investment portfolio where the capital produces best interest and grows optimally.

From CV to the competence portfolio

For workers it should be useful to assess their own skills and capabilities in relation to their factual (1) core work knowledge, (2) customer-specific knowledge and (3) strategic competence and knowledge. Each individual has his or her own competence portfolio. They negotiate and make work contracts in the labor market based on their own personal competence portfolio.

On the other hand, each has its own employee talent portfolio, which they can develop through training, education and self-improvement. When an employee goes to work for any organization, new work represents an opportunity to develop his/her competence portfolio more versatile and add something valuable to their own competence portfolio. Also, the employer has the chance to develop the whole company’s total human/intelligence capital portfolio. In the best case both parties will benefit based on Win-Win principle, i.e. the employee can increase the value of his/her competence portfolio and the employer receives an additional contribution to the knowledge-based capital portfolio. In addition, this kind of competence portfolio may be the great possibility for a wide range of investment opportunities and business agreements.

Like in the business world, start-ups and companies develop new business models, workers should also develop new kind of competence portfolio models, which help them to diversify risks and work investments in their personal life. Modern portfolio theory (MPT) is a theory on how risk-averse investors can construct portfolios to optimize or maximize expected return based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. This kind of MPT thinking can be applied also to work markets, where workers invest in their competence portfolios. Why we allow risk management based concept/model? On the MPT for companies, but we do not allow the MPT for workers? Indeed, the WaaI model allows portfolio thinking for all workers.

Like in stock markets investors invest in many companies, WaaI suggest that workers could invest their work input in several companies. A WaaI -investor can have a number of human capital portfolio contracts. This requires, of course, that the investors’s and the company’s roles are very clear, which is not always true in the conventional labor market.

There are also many trainers and educational organizations, that can be involved in the contract and competence portfolio model. For example, today through crowdsourcing business models citizens will reach very “divergent model” agreements in the labor market. Actually, some of these new contract models are not particularly fair. If you want to see work as an investment, it requires a kind of an investment agreement with an investment commitment to a genuine on both sides of portfolio contractors. Admittedly, new research is needed to clarify the operating work contract models in which both workers and employers are free to agree on the terms of the work carried out. In the very traditional model of “paid work”, involved parties do not have a clear idea of the portfolio investment model, which makes it a high-risk contract model in the rapidly changing labor markets. The traditional model of “paid work” or employment also displaces many people from the labor market, if they are not ready to set up their own companies. This is a real problem in the freelancer work market.

A useful model to understand the key components of competence portfolio was developed by Professor John Holland when the RIASEC personality model was formulated. According to this model, people´s orientation can be classified as Realistic (Realistic), Investigating (Investigative), Artistic (Artistic), Social (Social), Enterprising (Enterprising) and Conventional (Conventional). This model has proven to be useful and reliable scientific basis as a model example of competence portfolio with strong career planning point of view. When the work is seen as an investment, the WaaI model can help people in their career planning and support people’s inherent personality traits and talents.

This kind of integrated WaaI model could be useful, for example, when labor unions, public agencies and private agencies want to develop effective local bargaining system (in Finland?). This conceptual model would also help to orient training and educational organizations providing the right kind of core work knowledge, customer knowledge and strategic knowledge. In Finland, the key challenge is to form a correct big picture of the knowledge capital of future(s?) of labor markets. In addition, correct precision training of national talent pool is by no means an easy thing to accomplish. Integrated WaaI model and the associated WaaI -portfolio competence model could be an effective and realistic approach to these future challenges.

Digital applications WaaI’s tools

In Finland, which is modern knowledge and innovation society, we can easily develop new intelligent digital applications, that would help to improve matching of firms and employees to the knowledge capital in a rapidly changing global labor market. Work as an Investment model could be a more realistic way of working in the changed social circumstances. The local intelligent bargaining model of labor markets, which functions digitally, could be sufficiently ambitious and bright model for the future developments of the labor market.

WaaI is a new social innovation. All sides of labor market stakeholders can benefit from WaaI in a big way. Like all inventions, the WaaI model also calls people for the further developments and piloting. After WaaI 1.0 comes WaaI 2.0. Nowadays, when more labor market flexibility is much desired, we need more dynamic experiment cultures and courage to make a new WaaI idea function in changing realities of work markets.

Jari Kaivo-oja (Research Director, Finland Futures Research Centre, Turku School of Economics, University of Turku)

“Science, says Kevin Kelly, is the process of changing how we know things. It is the foundation our culture and society. While civilizations come and go, science grows steadily onward. It does this by watching itself.” – https://edge.org/conversation/speculations-on-the-future-of-scienceRise of the Robots is a landmark book which continues the provocative analyses of Lights in the Tunnel of Martin Ford (2009).

Silicon Valley entrepreneur Martin Ford gives us new and updated arguments to the discussion of technological revolution we are facing today everywhere, in the US, in the Euro zone and in the BRICS countries. Not only developed post-industrial countries rely on advanced robotics – but also developing countries are adopting new AI and robotics solutions. Only few eminent thinkers think about the futures of corportions and nations after rise of robots. Fortunatelly – we have eminent scholar and engineer Martin Ford to think forward. Technological foresight analyses tell that next 15-20 years are meaning enormous and disruptive changes in our economies and business networks. The threat of jobless future and massive technological unemployment are real and evidence-based. Only the very fool conventional neoclassical economist doubts it.

System modeler Martin Ford provides a lot of empirical evidence from US, which indicate not marginal changes but massive technological disruptions in the US economy. Martin Ford continues the tradition of John Maynard Keynes in his discussion about technological unemployment. He also continues the tradition of Joseph Schumpeter in his discussion of disruptive technological changes (McKinsey Global Institute 2013) . Martin Ford has now updated these classical analyses to meet the grand challenges of today and tomorrow. We must give full respect to him.

AI and robotics are making “good jobs” obsolete and vanishing. Smart software, robots and AI-based solutions replace many white-collar jobs. Paralegals, journalists, office workers, teachers, health care professionals and even computer programmers are poised to be replaced by disruptive technological innovations. Autonomous robotics and swarm robotics change many service architectures and service designs. Key change – identified by Martin Ford is that a tight relationship between wages and productivity does not hold any more in the US economy. This is a dangerous phenomenon for the future welfare of people. Robotics is not a novel issue in the economic history. In industries and agriculture there have been a lot of robots and automation solutions. All we know the Luddites discussion and Race Against Machine analyses of Brynjolfsson and McAfee (2011) (http://www.amazon.com/Race-Against-The-Machine-Accelerating-ebook/dp/B005WTR4Z ).

Now newest thing is the emergence of service robotics. We can see many service robotics innovations in health care, hotel and recreation industries, retailing, and libraries – and in many other service sectors. Personally, I think that Mr Martin Ford is absolutely right when he notes that we are moving towards a new economic paradigm of smart machines. He is not in bad company, because there are such research fellows like Ray Kurzweill and Michio Kaku, who think in similar way. Personally, I respect these eminent research fellows. It is also good to remember that Gardner Inc notes that “CIOs must start considering how to develop ethical programming for smart machines”. Realizing the potential of smart machines and AI — and ensuring successful outcomes for the businesses and societies that rely on them — will hinge on how trusted smart machines are and how well they maintain that trust. The trust matters. Central to establishing this trust will be ethical values that people recognize and are comfortable with. Transparency of rise of the robots will be needed.

There will be need to develop policies and social innovations which recognize disruptive innovations and their impacts on industries and services. As Martin Ford says we need transformation of higher education, new thinking in the health care sector, new industrial Industry 4.0 strategies (as Germans say it), national robotics strategies (like From Internet to Robotics, 2013) and new kind of consumer politics. We need also new social innovations for the super-intelligence solutions and for the singularity. Radical innovations cannot be managed by incremental innovations. More fundamental new ideas and inventions will be needed. These ideas must go beyond crazy year of 1848 (see De Maesschalck 2005 and http://wrap.warwick.ac.uk/888/). We are busy now to respond to these “old challenges of capitalism”. New capitalism needs BohoBusiness (2015) thinking if we want to be honest to ourselves.

It is interesting to compare our recent book BohoBusiness – Winning in the Age of Bohonomics with Martin Ford´s outstanding book Rise of the Robots. Our book shares many similar themes with Martin Ford´s book. In our book key theme is a question: What human beings should do in the conditions of disruptive changes? Our approach to question is linked to the analyses of learning, bohemian attitude, flexible radical organization culture, role of human creativity and social innovations. These issues are vital in the conditions of radical and disruptive changes. We are also discussion much about global trends and associated changes. In this context the ownership and distribution of wealth are not marginal issues. For example, creating a learning and creative hybrid economy in the conditions of robotics will be a very challenging social and cultural issue. Our book provides some new fresh insights to this broad old challenging issue.

Probably a biggest issue in robotics debate will be the question: “How are we organizing society when too many people are coming into the labor market and too many machines are throwing people out?”. Our sincere answer is focused on self-organization of individuals, organizations and institutions of capitalism, because we rely on the learning capacity of capitalism. First pre-condition for this kind of self-organization is, of course, future awareness. Both Martin Ford´s book (2015) and our book (2015) have already now improved future awareness of many people and decision-makers. We need more political and economic decision-makers who understand complex social problems like robotics and AI driven society. However, a new economic paradigm is not automatically developed. We know quite well this societal challenge. One can just study the current storyline of post-modern Greece and its economy to understand this.

I just was an expert in the EU OSHA Bilbao conference in Bilbao, Spain in May 2015, where the official delegate member of Greece explained to me in EU OSHA workshop session what robotics means for Greece. I was informed that it means cosmetics robotics in isolated islands for them and they were very happy with this strategic economic growth approach. In the session, the German delegate explained to me much more comprehensive program of the robotics strategy in German economy. To conclude …. pre-conditions on robotics matter – whether it is in the U.S. or China – just to mention it for curiosity. Of course, I know that US strategy “From Internet to Robotics” (2013) is a smart strategy and Ford focuses on it. Smart action from him, indeed. To sum up … the real character of corporations and organizations still matters. Organizations´ culture can make or break their existence and business. We still need visionaries and change makers. In many cases they are radical and bohemian game changers. In BohoBusiness we propose an unholy partnership: bohemian individuals and organizations combined with smart machines.

Eric Abrahamson (2000) noted in his famous Harvard Business Review –article that “To change successfully, organization should stop changing all the time.” Today we know that almost all organizations need dynamic stability and ability to change, but if there are too many changes there will be problems to manage all these changes. Often changes cannot be implemented without pain. However, an ideal change process should happen without pain.

One way to implement changes is to create modular elements of change. If change is too big, it creates a lot of stress and pain. Small change efforts that involve the reconfiguration of existing practices and business models are often the best practices of change. If we create big and massive change processes, risks are going to be bigger that planned massive change process is going to be a failure. If we can do this, change process will be organic change, not mechanic change.

To be ready for changes, we should develop change-able and learning organisations. One of the worst barriers against organic change is keen and even active refusal of learning. If we do not want to learn, all changes will be unsuccessful. Some beings are able to learn, some others are not able learn. If we want to develop change-able organisations, we must pay special attention to learning capacity of individual and social teams of organizations.

Professor Robert W. Rowden (2001) has recognized in his scientific article that there are three types of change: planned change, implementation-focused change and readiness-focused change. All these “change types” need a special attention. Sustainable, high performance depends on organisation´s ability to respond quickly and efficiently to changing circumstances in their decision environments, which are today networks, markets and crowds. Especially, our abilities and skills to make sense of changes, matter. Nowadays making sense is not easy. We must analyse a lot of data, information and knowledge. If we do not understand the nature of changes in critical networks, new markets and emerging crowds, we are out of success. Some other organisations, which do it better, will be more successful.

Today´s organizations operate in a challenging environment. In a more complex world, change has become the constant. Just add globalisation to technological shifts and multiply it by today´s volatile economic trends and the pace of change is breath-taking. Making sense of changes is today one of the biggest challenges in organisations and companies.

We should also understand that people are very interested why they need to change. Often people are very tired of changes, before planned changes. Generally speaking, the motivation of people depends on our sense making skill and abilities. If we cannot explain, in a good way, why changes are needed, we cannot motivate people to learn new things, change their habits and find better ways to work. Motivation is a key issue in change management process. If motivation level is low, change process is not going to be successful.

In change-able organizations a way of being is different. In this kind of organisation people are able to change fast, but also they are able to manage knowledge. For such learning organisations, typical characters are: constant readiness, continuous planning, improvised implementation and action learning. These characters require training and tutoring inside organisations. They do not emerge automatically in organizations.

People resist changes for many reasons. Sometimes they want to deny the needed changes. Sometimes people are anger and they blame managers and leaders. “Over my dead body” is one typical reaction to needed changes. “This is nothing new” is another reaction to changes. Sometimes people are simply confused. Then “I do not understand what is going on” is a typical reaction.

In classical Lewin´s study “Field Theory and Social Science”, he described the tendency by people to consolidate negative behaviours as “freezing”. This phenomena is still relevant for change management. Smart leaders can find ways to “unfreeze” by right messages, implementation activities and role models.

The organisational climate of change must be created every day in companies and organisations. Leaders of today need to manage implementation in ways that protect and grow business rather than destroy the very organisational skills and motivations which offer the potential for innovation and new business models. From this perspective we are living interesting times. Many organisations are not able to survive. Some others will find their ways from chaotic conditions.

Whether you are leader, manager or worker, we can ask: is your personal attitude right and mature enought to create optimal organisational climate of change?

How to handle decision making in the management teams? In many companies’ management and leadership processes seem to work well, but suddenly something surprising happens. In spite of many cross-checks and meetings, things turn into a non-expected direction. All think that everything was in place … but then something emerges and business plans are outdated in a day. Why this happens?

It is typical than there are always some biases in management teams of companies. It is typical that for individuals it is not easy to make question marks on official agreements and strategies. Even though all nod in agreement and look happy it is not easy to say something critical. “It was settled” or “we all agreed” are typical notes on the memos of companies in this kind of decision situations.

Raising dissenting voice is not easy – especially when the chief boss decides something. It is much easier to be among “yes-sayers” than among “critical questioning men”. Self-fulfilling prophecy is the tendency to engage in behaviors that elicit results that will (consciously or subconsciously) confirm our beliefs. “Yes men” cause self-fulfilling prophecies. There can be also a halo effect, the tendency for a person’s positive or negative traits to “spill over” from one area of their personality to another in others’ perceptions of them.

In many case studies of management processes, some typical mistakes have been identified. First, there is tendency to devote attention only to those events seen as most likely. Secondly, once the team of decision makers had made up its mind as to what was going to happen, even conclusive information that the decision was poor did not change the prediction and associated decision. Thus there is typically a problem of groupthink in management teams. One reason for this problem is homogenous social and cultural backgrounds.

Often management teams have similar backgrounds: university degree holders, men with similar hobbies, career paths, middle-class people, and homogenous values. False consensus effect means the tendency for people to overestimate the degree to which others agree with them. Sometimes there can be anchoring decision-making biases, where there is the tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions.

Another problematic issue in management teams is overcoming overconfidence. The future looks assured for them. Their judgments are made with deep confidence. However, people may feel confident that they do know the right answer but actually don´t. They don´t know they don´t know. Other options of knowing are: (1) They do know they know; (2) they don´t know they do know and (3) they do know they don´t know. Obviously the best option would be to know that they know. In reality this option is not often available for a management team.

Third typical bias of a management team is a confirmation bias. What it means? It means that we don´t place ourselves in situations where we can test the quality of our judgment. We want to seek that information that will confirm the quality of our predictions and decisions. It is quite human character of people, wanting to be in right – winning team. In this way we are selective in our observations.

Fourth bias in management teams, is so called hindsight bias, which is connected to our readiness not learn from experiences. In general, we don´t learn from experience because experience has little to teach us. That is why our recollections of our judgmental predictions confirm these to have been accurate. Some call this bias “I-know-it-all-along-effect”. Thus, our judgments are rooted to history and it cause biases to emerge.

Fifth bias can emerge because we rely on expert predictions too much. We can call this bias as an expert bias. Also experts can cause group thinking bias and other people may suffer from this kind of bias. There are many other kinds of biases, too like randomness bias, sunk-cost bias, self-serving bias and escalation and commitment bias. Projection bias is close expert opinion bias. It is the tendency to unconsciously assume that others share the same or similar thoughts, beliefs, values, or positions.

Sixth bias, randomness bias means that there is a tendency people have to seek patterns where none exist and to invent the existence of unjustified causal relationships. It is the tendency of people to make sense out of events which are so random in nature that not enough should be read into them. Close to randomness bias is Gambler´s fallacy, the tendency to assume that individual random events are influenced by previous random events.

Seventh type of bias, sunk-cost bias is often connected to too optimistic thinking. Sunk-costs are costs that cannot be recovered once they have been incurred. Sunk-costs bias greatly affects the decisions, because humans are inherently loss aversive and thus normally act irrationally when making economic decisions.

Eight type of bias, self-serving bias occurs when people attribute their successes to internal or personal factors but attribute their failures to situational factors beyond their control. The term, “self-serving bias”, is used to describe a pattern of biased causal inference, in which praise or blame depend on whether success or failure was achieved in reality.

Ninth type bias, escalation and commitment bias means tendency to invest additional resources in an apparently losing proposition, influenced by effort, money, and time already invested. The term is also used to describe poor decision-making in business, government, information systems in general. Escalations and commitment biases are typical in software project management, in politics, and in addictive gambling. To sum up: there are 9 key sources of bias in management teams:

It is good to be aware of these potential decision making biases in decision making situations. We could avoid these typical biases, if we were aware of these potential biases. The lessons from history can tell us that many management teams do not identify these biases and serious management failures happen. A sad truth is that we don’t always learn from experiences. There are very many historical lessons available for decision makers but we should learn something from these old lessons. From this perspective “learning organization” is a modern myth.

There is need to question some issues (and biases) in many management teams. That why bohemian persons and “out of box” thinkers may be very valuable members in management teams. It is easy to say that we should be free of biases, but in reality we are often slaves of biases and fallacies. Only personal and critical reflections can help us to be free from these biases. Open and critical discussions in management teams should be encouraged and supported too. Daily illusions about effective control should be avoided in all the decision-making situations and processes.

Financial Times Lexicon defines hypercompetition in a following way: ”A situation in which there is a lot of very strong competition between companies, markets are changing very quickly, and it is easy to enter a new market, so that it is not possible for one company to keep a competitive advantage for a long time”. (See http://lexicon.ft.com/Term?term=hypercompetition). Many economists have noted that hypercompetition leads markets to unstable conditions. Theories of general equilibrium in markets and automatic stabilization of markets do not hold, if markets are in unstable conditions. Richard A. D’aveni introduced this concept to scientific discussion of company and corporate theories. His book “Hypercompetition” is a classic book in the international management literature. One key statement of his book was that competitive advantage can no longer be sustained.

Hypercompetition results from the dynamics of strategic maneuvering amongst many competitors. It is the condition of rapid escalation of competition based on price-quality positioning.

Corporations and companies want to use other tools to compete under conditions of hypercompetition. They do not want to start price wars. In such conditions corporations want to be Cost & Quality (C-Q)-leaders or followers. They may want to create Timing and Know-How (T-K)-Value chains and build new efficiencies. In some case they may rely on Strongholds (S)-Core or on Distinctive Competencies. Deep pockets strategy is based on the availability of financial capital. (see http://blogs.msdn.com/b/archetype/archive/2006/07/24/677222.aspx).

To escape disastrous price wars, modern companies try to occupy different locations on the price like brand strategies, offering mass customization, quality axis, using micro-marketing, and shifting strategies based on the changing anatomy of industry trends.

To sum up, new arenas of hypercompetition are:

Cost & Quality (C-Q),

Timing and Know-How (T-K),

Strongholds (S), and

Deep pockets (D).

Hypercompetition is emphasized on several occasions – in particular, in the creative economy in the context of organizational development. Success is based on the fast changes in hypercompetitive business environment. Agents and leaders must change rapidly and understand and internalize weak signals in their decision environment. For a company to stay alive and competitive it must very innovative. It mean that a company delivers novel and advanced products and services for which there is little or no equal in the marketplace. Commodity differentiation and branding are key aspects of hypercompetition. Hypercompetition is focused on is new ideas, inventions and innovations.

Now many experts have started discuss about hybrid economy. What is hybrid economy? How it is connected to hypercompetition? A hybrid economy is any type of local, state, or national economic system that involves a more or less equal focus on two or more different types of economy.

This hybrid economy model is a relatively common structure that has been utilized in many different settings over the history of humankind. For example, in traditional agricultural society there were exchange and storage economies. Some examples of a hybrid economy may include a creative economy, a military-industrial based economy, a university-industry based economy, or hybrid economy based primarily on a mix of business and government. Thus, there are various forms of hybrid economy. New forms of hybrid economy include typically e-business and internet economics.

These forms of hybrid economies are not fitting well to pure exchange mechanisms of market economy. The reason for the existence of hybrid economies is that they promote stable systemic mechanisms than market economy or unstable hypercompetition. The element of public good is typical for hybrid economies. We can even claim that in the future we need more elements of hybrid economies to make capitalism work better. If we want that capitalism delivers benefits and positive values to everyone, there is need to develop more innovative patterns for the hybrid economy. New forms of hybrid economy can also include dynamic elements of social innovation.

The transition to a hybrid model of competition does not mean that the market would disappear, and markets would not be relevant for transaction mechanisms. This is something that should be emphasized. Also hybrid economy is based on competition. Hybrid competition is a very important new element in the global hypercompetition. Hybrid competition is also connected to good governance systems and to trust of democratic agencies and institutions.

We can take a number of reasons why the hybrid competition has risen and continues to rise as an important part of people´s and organizations´ wealth creation processes:

• Globalisation and its associated cultural interactions;

• The penetration of the Internet and related digital networking;

• Digital technology innovations (Web 2.0, Web 3.0 and Web 4.0 etc.);

• Pressures and unstable processes of the hypercompetition;

• Ubiquitous r/evolution, the Internet of Things and other digital forms of evolution like Cloud Computing and Big Data), and

The global economy means a new division of labor in the world. Workplaces are lost in some countries and regions and in some other places people are creating new jobs.

Frequently asked question is what kind of new work places can be created after old work places are lost? One obvious answer is: “Something else”. People have always developed something else after the loss of permanent jobs. The big problem is that it may take too much time to find new jobs, if we do not make systemic changes to the postmodern societies.

If we rely only on the hypercompetition and market mechanism, our societies will be very unstable and cause a lot of social losses. If we really can develop new social innovations and new forms of hybrid economy, we can expect that social and economic transition processes will be faster, less unstable and cause less welfare losses.

Today we must allow multiple stakeholders to negotiate over how to attain a desirable future. Developing new innovative forms of hybrid economy will require new forms of dialogue and debates. The only option is not unstable hypercompetition, which mostly delivers benefits of exchange and markets unethically and unequally.

It is worth of underlining that people create their economies and systems of governance. It is worth of noting that in capitalism people are allowed to think freely. These two things are relevant if we want to save capitalism and re-invent it as a dynamic form of global governance.

As we know reductionism is the view that the behavior of a system can be explained by understanding its components. Reductionism is the basis of how any researchers starts to solve a complex problem. S/he divides the problem into sub-problems, analyzes them, and finds their solutions and may divide them to sub-sub problems for more simplification. And so progress of science continues. Mostly, this is the basis of the western science. When reductionist model is used as an explanation it depends on an analogy between the components of the model and the components of the system. The analogy is between the components of the model and the parts of the model. For example, Descartes proposed an idea that non-human animals could be reductively explained as automata.

Reductionism can mean either (1) an approach to understanding the nature of complex things by reducing them to the interactions of their parts, or to simpler or more fundamental things. Reductionism can also mean (2) a philosophical position that a complex system is nothing but the sum of its parts, and that an account of it can be reduced to accounts of individual constituents. Methodological reductionism is the strong position that the best scientific strategy is to attempt to reduce explanations to the smallest possible entities. Thus, according to methodological reductionism, all scientific theories either can or should be reduced to a single super-theory through the process of theoretical reduction.

Reductionists do not view that systems somehow function as wholes and that their functioning cannot be fully understood solely in terms of their component parts. They believe that sub-systems of the whole system do not have any problematic functioning. Reductionism in science means that a complex system can be explained by reduction to its fundamental parts.

Holism is another view to understand systems. The idea of holism was broadly presented by Jan Smuts, the famous military leader and a philosopher, but the principle of holism was concisely summarized by Aristotle in the Metaphysics: “The whole is more than the sum of its parts”. Holism is the view that some phenomena that appear at the system level do not exist at the level of components, and cannot be explained in component-level term. Thus, holistic models are more focused on similarities between systems and less interested in analogous parts. A holistic modeling approach to modeling often consists of two steps (not necessarily in this order): (1) Identify a kind of behavior that appears in variety of systems and (2) find the simplest model that demonstrates that behavior.

Holism is based on a basic idea that the whole has some properties that is parts lack. Holism has traditionally appeared as a model of thinking in the philosophy of biology, psychology and in the human sciences. Holism is the big modeling idea that natural systems (social, economic, physical, mental, biological, chemical, linguistic, etc.) and their properties should be viewed as wholes, not as collections of parts.

In the latter half of the 20th century, holism led to systems thinking and its derivatives, like the sciences of chaos and complexity analysis. There are hard systems theory and soft systems theory. Systems are frequently so complex that their behavior is, or appears, “emergent”: it cannot be deduced from the properties of the elements alone. Thus it is also “new”. Emergent, self-organizing systems are a part of the whole system in many scientific analyses of psychology, sociology and biology. Scientific holism holds the idea that the behavior of a system cannot be perfectly predicted, no matter how much data is available. Even “big data” does not solve this fundamental scientific problem.

We cannot explain the existence of synergy without holistic thinking. According to scientific interpretation of holism, there are good ontological reasons that prevent reductive models in principle from providing efficient algorithms for prediction of system behavior in certain classes of systems. This is a very serious question for many fields of new inventions and innovations. Why to accept limits for ideas?

With roots in Joseph Schumpeter, the evolutionary approach might be considered the holist theory in economics. Evolutionary economics deals with the study of processes that transform economy for organizations, companies, institutions, corporations, industries, employment, production, trade and growth within, through the actions of diverse agents from experience and interactions, using evolutionary methodology. Evolutionary economics share certain language game elements from the biological evolutionary approach. Thomas Kuhn, the author of “The Structure of Scientific Revolutions” (1962), accepted this kind of evolutionary approach to scientific (r)evolutions.

Innovation processes are not easily explained by reductionist models. Evolutionary economics is typically used when innovation processes are explained. Evolutionary economics analyses the unleashing of a process of technological and institutional innovation by generating and testing a diversity of ideas which discover and accumulate more survival value for the costs incurred than competing alternatives.

One can note that holism and reductionism are different models with different purposes. For reductionist models, realism is the primary value, and simplicity is secondary. For holistic models, it is the other way around.

Thus, the choice of modeling is a normative choice. We should be open for both perspectives of the big science. Reductionism helps us to focus. Holism helps us to open our eyes.

There is a critical need of every business today: leveraging creativity. There are not “hocus-pocus” solutions how to develop, nurture and manage models for sustained innovation. One thing is certain issue in a process of boosting corporate creativity: It is not one-man show. Collaboration must be embedded into corporate culture as a way to foster ideas, inventions and innovations of products, services and processes.

One self-evident starting point for boosting corporate creativity is the following: Creative people make innovative organizations. If there are no creative persons and change agents inside an organization, this kind of organization never will be innovative.

Too often organizations and corporations want have average persons with average abilities and teams. Going beyond the average with high level of diversity is seen to be too dangerous and risky in many corporations.

Uniform business culture is seen safer than more individual and proactive business culture. Many managers and leaders want to be inside their “safety zones”. However, we really need unique products and services to be competitive in the markets of hyper-competition. There is not too much fresh thinking in organizations and corporations. Sometimes our wrong self-images, rigid self-esteems and self-punishment mechanisms prevent us to innovate. In corporations we must destroy the barriers to get new ideas.

Too uniform approaches do not help us to make a difference. Infinite possibility awaits those willing, able, and prepared to make the journey to creativity and innovations. We must be brave to explore and exploit new possibilities. First we do it in our imaginations, then with our technology, and finally through our direct action and experience. Creating new ideas and innovations is inherently fun, but also necessary. People need muscles, but they need also big creative muscles and strong brain power.

How to boost creativity in the corporate world? It is possible to present 10 principles to boost creativity:

Develop many new channels and sources for new ideas and inventions.

Make barriers to getting new ideas as low as possible.

Collect many ideas with predictable, directional and surprising ways and evaluate them with collaborative models and co-creative ways.

Implement ideas and inventions. Test and pilot ideas and inventions.

Develop a broad understanding of innovation management and creative thinking.

Identify blocks to creative thinking and the skills individuals can use – and managers can foster to increase creative responses.

Use knowledge and intuition based methods to get fresher ideas and solutions more often.

Allow a personal creative drive and innovation flow which will help people to achieve their personal and professional goals.

Create creativity programs for individuals to improve their creative abilities inside the corporation.

Motivate and give value to creativity and new ideas. Create an effective incentive system, which motivatescreative thinking, inventors and innovations.

Organizations need also bohemian game changers. They never settle for average performance. They know that you can perform a task better this time than you performed it in previous times. With any task you set your mind to, always give it your best. They have stopped living their life in a routine calendar system.

Mediocrity mentality will never help your organization to big success. It will do damage in the material as well as in your spiritual life. Only doing enough to get by is considered mediocrity, not excellency. Mediocrity is dangerous for creativity and destroying innovation activities. Mediocrity is ordinariness as a consequence of being average and not outstanding. Mediocrity refers to a person of second-rate ability. The individuals that practice mediocrity take on its characteristics, which is inferiority and inadequacy.

To boost creativity is a big possibility for all the corporations. There is need to take creativity seriously and develop systemic strategic thinking and actions in favor of creativity and innovative organization.

Inarguably are we entering a new era where all kind of measuring based on the means of the industrial age are passé, and not only that. They can be pernicious as well. An old saying claims that you get what you measure and that is quite true – we have been measuring beans and coins and that is what we’ve got, lot’s of money somewhere marked with a minus and somewhere else with a plus. Funny thing is that actually the beans and coins game has ended up as a minus sum game as the global debt shambles is out of control.

Companies CSR efforts have not resulted in radical betterings partly perhaps because they are used merely as tools for PR.

In 1994 John Elkington suggested Triple Bottom Line approach where the companies bottom line should be expressed three dimensionally: people, planet & profit. The idea faded away with cost cutting being the main priority for businesses.

An interesting discussion about Shared Value is going on and leading us once again to discuss capitalism and it’s benefits and flaws. Prof Michael Porter presents a positive view while John Elkington is a bit dubious.

Why is the discussion of the bottom line and capitalism so important for the modern Bohemians and BohoBusinesses? We do not believe that money is going away as a tool for exchange. As Prof. Tom G. Palmer says: money is an tool for dignified exchange of products and services. As a creative worker I more than agree with Tom’s statement, bartering can be satisfactory for some time but in the long run it brings about dissonance between people. Well, and does not contribute to the society in form of taxes neither.

When thinking about the new solutions for businesses to contribute to the common global good we cannot and should not forget the people’s and companies pursuit to win and by so means create profits that can be invested in new endeavors for development and better lives.

Therefore we see that the Bohemian way to look at sustainable business, BohoBusiness, is the win*win(+win). In this equation the partie’s create multiple wins and also cause beneficial impacts to third parties. In other words we are not denying the creation of wealth, profitable business and the thriving of individuals, teams and organizations but we suggest they along with their strategies and actions strive to find ways to contribute to the society and the planet as well, not only as individual companies but as a part of partnerships as well.

In the win*win(+win) way we believe that the Bohobusinesses can take CSR, Shared Value and TBL into their strategies, tactics, operations and daily actions. The win*win(+win) provides also the artistic and innovative Bohemians an ethical scheme to look at their work also from the point of view of profits and on the other hand for the economics and material oriented a way to take the +win as a part of their paradigm.

Actually the +win is the key to great victories and profits in the more and more robotizing world. The deals between partners are often times such that they do not require broad and creative intelligence. Seeing the future, the planet and the needs of humanity on the other hand require such abilities to conceive that the robots are hardly getting there yet in some decades.

Besides, we are here to have fun, enjoy our lives, our families, to work with passion, to connect and cooperate with others. We all have unique talents and skills. It is our birthright to live up to our best selves. This is to win and with win*win(+win) we can multiply the joy and make life and business a co-thriving journey.

Think about yourself walking in a thick jungle. In a jungle where the branches, bushes, lianes and the thick undergrowth makes your progress hard. Bristling with fear and anxiety you bulldoze your way forward with a help of sticks and knives. The knowledge that there might be dangerous beasts lurking among the vegetation doesn’t make your race any easier. You must constantly be prepared to attack and protect yourself.

Now imagine, that the jungle is finished and you entered a deciduous forest. The vegetation is still lush but not stickingly thick. However you keep your knife and stick ready and from time to time you cut a low hanging branch. And you are hoping that you’d get out of the jungle one day.

You are not ready to adopt the new environment even though you are in the middle of it. You are in deciduous woods clamouring for a change in the jungle.

We are so used to live depending on one big truth. To believe in one big truth. Not necessarily because it would be the only one but because it makes our lives easier.

The world has changed from a space divided with frontiers to a boarderless web of people. Different truths and ideas can wander freely and meet people also there, where the one truth nepotism has selfishly built isolated societies.

The discussion about the morality of capitalism is a sign of the change that is already going on. A crowd of people has left the jungle capitalism and moved into a grove of new economics. Yet many cry “it’s a jungle out there”, dangerous and hard.

”Capitalism is a system of cultural, spiritual and ethical values” says professor Tom G. Palmer in his book “The Morality of Capitalism”. Yes. And the mission for the people is to create for that system a content that serves the highest purposes of the human kind. Then capitalism can be a system where the right to ownership and the freedom to make agreements in the spirit of free will can be realized.

Marc Luyckx Ghisi a professor of Future Studies from Belgium says “Truth is in the empty center of the common table around which all cultures are sitting on an equal footing. Women and men are also equal. The urgent scope of life is to care together for our survival. But the main goal in life for everyone is to reach the center, the “divine light” or the “absence of light”. And the more you approach the center, the less you can define what the illumination is. You are only able to experience it. And nobody owns or controls this “empty” truth. It is impossible.” The nature, animals and plants are part of this consciousness and thus respected.

The truth, the light in the middle of the world-table, is a common emotional experience that the value that the individuals bring to the table creates something big and meaningful when it is integrated into the common flow of values.

This is the new world we are living in. Call it transmodern or post-post modern or a world of people, without definition… I kind of a world where “… the value grows by mobilizing the energy and capacity for invention of the people in an unprecedented scale, so that wealth is created to a common man…” in Tom’s book the sentence begins with the word “capitalism”.

Why do we need words? We need ideological vehicles so that we can realize in what kind of woods we are walking in. The word capitalism is difficult to accept for many. It is loaded with heavy accusations but perhaps it is the right word when we seek for a vehicle to express the economics of this new world.

But if capitalism has made damage to people’s souls then we need to find a new vehicle to describe the system of freedom, spiritual values, the uniqueness and talent of the individuals, creative projects of societies, tribes and movements, holism without reductionism in the name of economics, wealth building without exploitation and robbery. “Substituting power with persuation and envy with achievements” says Palmer. Yes. Palmer emphasizes that capitalism does not include greedy exploitation and robbery because they lack the element of mutual free will.

My credo is ”we are built to win”. A human being is endowed with unique potential and her/his life is a work of art that we all must respect. The world is simultaneously a collection of talents and a shared, cooperative performace, “a concert of a globalized planet” *, where each and every one adds value with her own talents and uniqueness. In a cocreative process an awesome tapestry with thick value is formed combining the spiritual and the material. The economy is a part of that performance and that, the economy, must be made to serve the human kind with the understanding that everybody is important and equally valuable.

Professor Bjorn Wahlroos talked about India. He reminded that it is not that long time ago the news we heard from India were those of famine. Nowadays we are hearing more and more good news from India. About flourishing businesses, great universities and exciting innovations. When the economy grows there will be space to handle other issues as well, human rights for example.

It would be unwise to push capitalism aside because of the greediness that has ruined it’s good parts. We need creation of economic value so that we can continue to develop well being of both people and the earth. But the capitalism must change. It must see that people have come out from the jungle. I’ll quote John Mackey who was interviewed by Tom G. Palmer:

”Capitalism is a source for value. It is the most awesome tool for cooperation. This is the story we need to tell. We must change the way we approach it. From the viewpoint of ethics we need to change the description of capitalism so that we can show that capitalism is about creating shared value, not for some but for all. If people would see capitalism as I do, they would love it as much as I do.”

*) The great concert of the globalized planet”, Mario Vargas Llosa, in Palmer’s book.